Dell founder 'turned down Autonomy'

Billionaire entrepreneur Michael Dell has revealed that Autonomy was offered
to him before it was bought by Hewlett-Packard, but that he rejected the
British software firm because it was “overwhelmingly obvious” that it was
overpriced.

Billionaire entrepreneur Michael Dell has revealed that Autonomy was offered to him before it was bought by Hewlett-Packard.

Speaking in an exclusive interview with The Sunday Telegraph, the founder of Dell, the US computer giant, said that “any reasonable person” would have drawn the same conclusion.

“It was shopped to us as well,” he said. But he added that Dell did not give it much consideration. “Not at that price. That was an overwhelmingly obvious conclusion that any reasonable person could draw.”

His comments raise fresh questions over HP’s decision to pay $10bn (£6.3bn) for Autonomy last year – a 59pc premium to its market value at the time – and its subsequent claim that it only overpaid because the British company had cooked its books.

HP opened fire on Autonomy earlier this month, accusing the company of using serious accounting improprietiesto wilfully misrepresent the business, which specialises in searching “unstructured data” such as voicemails, texts and videos. HP made the claims as it wrote off $8.8bn, including more than $5bn from the value of Autonomy.

Mike Lynch, who founded the software firm on the back of his PhD work at Cambridge University, has vehemently denied the charges, claiming HP put a major dent in Autonomy’s value by severely mismanaging the firm. Analysts and investors have questioned why HP didn’t identify the alleged accounting improprieties when it was doing its due diligence on the $10bn deal.

Michael Dell echoed their concerns, saying he had been hugely surprised at the size of the premium HP was willing to pay. “The premium that you pay is in some way a measurement of the risk that you’re willing to take on. If you pay a small premium relative to the market’s then current opinion, you are actually not taking on very much risk, but if you pay an unbelievably large premium, you are taking on an unbelievably large risk,” he said.